THE first Conservative-Liberal Democrat Budget ignores Wales and threatens to plunge the nation back into recession, First Minister Carwyn Jones warned yesterday.

The Welsh Labour leader said Wales had got “nothing” from the Budget and he expressed “grave concern” that Wales is not on the Westminster Government’s radar.

The full strains in the relationship between London and Cardiff Bay opened up as he and Plaid Cymru Deputy First Minister Ieuan Wyn Jones gave a scathing assessment of the Budget they believe will hurt Wales “disproportionately”.

The First Minister said that while English councils would get help to avoid raising taxes and Scotland and Northern Ireland would receive special assistance Wales would continue to be underfunded by around £300m a year.

He said: “We do accept as a Government that savings need to be made. We knew that would be the case regardless of whoever was elected in the general election last May.

“We are, however, deeply concerned about the depth of the cuts and their speed, particularly the effect the cuts will have on Wales in terms of the danger of us moving back into recession.”

He added: “It’s our belief that Wales will be disproportionately affected by this Budget.”

Turning his guns on Conservative Prime Minister David Cameron, he said: “We are also disappointed the respect agenda the Prime Minister has talked about has been tarnished. The reason why we say that is there is no specific mention of Wales in this Budget.

“England gets a freeze on council taxes and extra money no doubt to do that – it’s been made clear Wales will get no money to do that as a result of that initiative in England.

“In Scotland, the Calman Commission’s proposals will be taken forward and also there are proposals to examine a fossil fuel levy which potentially could release a substantial amount of funding for Scotland.”

Northern Ireland may gain the power to change corporation tax levels, he added, but “Wales, on the other hand, is not mentioned in the Budget.”

He was concerned there was no mention of the Holtham Commission which calculated Wales was underfunded by £300m a year. Nor was there any hint that the funding formula would be changed to ensure this does not continue or that measures will be taken to lessen the blow.

He added: “There is a serious risk that the Budget may take us to a situation where we go back into recession in Wales because of the nature of our economy and of course the number of public sector jobs that we have in Wales.”

Ieuan Wyn Jones said: “Creating a stronger private sector in Wales, at least in the short term, is not helped by the fact there are substantial cuts in the public sector. And of course the VAT increase in the Budget will make it more difficult, particularly for business people to be selling their goods.”

He was concerned the UK Government did not make it clear it supported the electrification of the London to Swansea rail line.

He said: “They missed that opportunity and we believe that this again shows the coalition Government in London not taking the interests of Wales [to] heart as they did for other parts of the UK.”

Confident that his concerns would be shared throughout the devolved regions, he said: “[You] can’t look at the UK as one entity. There are different needs in different parts.”

A draft Assembly Government Budget is not expected until November, following October’s spending review.

Ministers are braced for cuts of £500m next year - next page

Ministers are braced for cuts of £500m next year. But the First Minister signalled that landmark policies are not destined for the chop.

He said: “It’s far too early to give precise details as to what might be contained in our Budget but it is right to say areas such as free prescriptions, areas such as swimming, breakfasts as well – those areas that have benefited so many people over the past few years, those are areas we would regard as priorities.”

Meanwhile, an independent think tank claimed yesterday that some Whitehall department could face budget cuts of as much as one third over the next four years, rather than the 25% suggested by the Chancellor.

The Institute for Fiscal Studies said the Budget had left public services facing the “longest, deepest sustained period of cuts” since the Second World War.

In his Commons statement on Wednesday, Mr Osborne said government departments were facing cuts averaging 25% over the next four years in the autumn spending review, apart from health (in England) and overseas aid, which are ring-fenced.

Rowena Crawford, of the IFS, said that if defence and education were cut by only 10%, the rest of Whitehall would be left with spending reductions averaging 33%.

Spending on the Home Office, justice, transport, higher education and housing could all suffer as a result, she said.

IFS director Robert Chote said the spending cuts planned by the coalition would more than reverse the entire increase in public spending under the 13 years of Labour.

“We are looking at the longest, deepest, sustained period of cuts to public services spending at least since World War II,” he said.

Prime Minister David Cameron suggested yesterday that successful reforms to the welfare state could reduced the pressure on departmental budgets.

He said: “We want to do everything we can to keep police officers on the streets, to have money going into our schools, to keep up spending on our hospitals and the only way we are going to be able to do it is if we deal with the problems of excessive welfare spending.”

One eye-catching measure in the Budget was a National Insurance concession for new businesses outside London and the south-east of England, thought to be the first-ever regionalised tax measure introduced at UK level.

Plaid Cymru said the principle should be extended to allow Wales to vary rates of corporation tax.

Elfyn Llwyd, Plaid’s parliamentary leader, said: “Mr Osborne gave us the astounding statistic that under Labour, for every job created in the North and the Midlands, there were 10 jobs created in London and the South-East.

“That shows the extent to which the UK economy is geared towards centralisation and the South-East.

“Varying corporation tax by each region of the UK would to help develop Welsh businesses and allow them to grow.”